B.C. Finance Minister Carole James updates B.C.’s employment situation under COVID-19 restrictions, B.C. legislature, July 10, 2020. (B.C. government)

B.C.’s potential deficit $12.5 billion as spending spikes, taxes drop

Finance Minister Carole James gives COVID-19 outlook

A combination of emergency pandemic spending and a steep drop in expected provincial taxes has B.C. projecting a potential deficit of $12.5 billion this year, Finance Minister Carole James says.

In an economic update July 14, James released projections of a $6.3 billion drop in sales and income taxes, natural resource revenues and Crown corporation income. Spending adds the rest to what started 2020 as a balanced budget with a $227 million surplus, adding a $6 billion more to the deficit.

James said the remaining $1.5 billion of the $5 billion emergency fund voted by the B.C. legislature will be allocated for economic recovery in September, after the government completes a public survey and continues meeting with business sectors on how to proceed.

Beyond the emergency spending for business and personal financial relief, more than $1 billion of the additional spending is in health care, including lab testing, supports for long-term care facilities, health prevention and contact tracing for COVID-19, and mental health supports. Another $250 million has been directed to maintain child care services.

Nearly $90 million has been directed to temporary housing, meal and health supports, in addition to $110 million to buy hotels to move people living in encampments.

Crown corporation income is projected to be down $882 million from the February budget forecast, which James said is mostly due to the shutdown of B.C. Lottery Corp. casinos due to the pandemic. ICBC costs have declined in the early part of the 2020-21 fiscal year due to a reduction in travel, but that could change as pandemic restrictions on travel are lifted and more people return to work, she said.

B.C. Liberal leader Andrew Wilkinson warned of the impact of B.C. tax deferrals that are expected to run out this fall.

“Back in May we suggested a 90-day break on employer health tax, sales tax and hotel tax to get the economy rolling again,” Wilkinson told reporters after the update. “And instead what we saw the NDP do is say, no, they’re just going to let it pile up until September, October and send a huge bill to all these businesses when they’re least able to pay it.”

RELATED: Canada, U.S. expected to extend border travel ban to late August

RELATED: Hotel rooms for homeless too hasty, NDP government told


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislatureCoronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Canal Beach in Port Alberni open for swimming

Beach had been closed in July after high bacteria readings were detected in the water

North Island College offers resources for students learning online

College will hold a ‘virtual orientation’ this week

QUIZ: How much do you know about British Columbia?

On this B.C. Day long weekend, put your knowledge of our province to the test

Port Alberni company earns $10,000 grant from Canadian Chamber of Commerce

Company produces specialized equipment for large-scale mining, logging machinery

Bread of Life receives $10,000 donation from Western Forest Products

The donation will go towards COVID-19 community response

VIDEO: Otter pups learn to swim at B.C. wildlife rescue facility

Watch Critter Care’s Nathan Wagstaffe help seven young otters go for their first dip

Cooler days help crews fighting fire on mountainside southwest of Nanaimo

Firefighters making progress, but it’s ‘slow-going,’ says B.C. Wildfire Service

Crews work overnight to try to put out wildfire on Pender Island

Fire department and B.C. Wildfire Service crews extinguishing fire in ‘extremely difficult terrain’

Michael Buble among 13 British Columbians to receive Order of B.C.

Ceremony will be delayed to 2021 due to COVID-19

U.S. border communities feel loss of Canadian tourists, shoppers and friends

Restrictions on non-essential travel across the Canada-U.S. border have been in place since March 2`

Rollout of COVID-19 Alert app faces criticism over accessibility

App requires users to have Apple or Android phones made in the last five years, and a relatively new operating system

Alleged impaired driver sparks small wildfire near Lytton after crash: B.C. RCMP

Good Samaritans prevented the blaze from getting out of control

Most Read